The amount of new London leases taken up by the largest law firms in the capital fell by more than 50% last year, as factors such as flexible working, new technology and the Brexit vote push law firms to rethink their real estate footprint.

According to the report by commercial property company CBRE, which canvassed the largest 100 law firms in London, the total space taken through new London law firm leases in 2016 was 499,900 sq ft – 55% down on 2015 and 36% below the 10-year average.

CBRE senior director Frances Warner Lacey said last year's Brexit vote was a key contributor to the steep drop in demand.

"The EU referendum had a dampening effect; there were a number of law firms that put relocation plans on hold. We are in a landlord-driven market, where lease terms of 15-20 years are required on new developments – that is a long-term commitment to make in an uncertain economic environment."

Business rates  may encourage firms to think about cutting back in the areas that are expensive

No law firms signed deals committing them to more than 100,000 sq ft in 2016, in contrast to 2015 when both Ashurst and DLA Piper agreed significant pre-lets. The largest deal of 2016 was CMS's leasing of 84,199 sq ft at Cannon Place ahead of its merger with Nabarro and Olswang, with lawyers from the three firms set to consolidate into one building when the merger goes live in May.

One City partner said that in the aftermath of the Brexit vote, "only an idiot would be expanding their space requirements".

Irrespective of the Brexit vote, law firms have become increasingly cost-conscious with regards to London real estate, as rental costs continue to rise. In addition, this year's business rates revaluation is set to have a major impact on firms, adding £31m to the total occupancy costs for London's 100 largest law firms, according to the report.

Warner Lacey says: "London has become an expensive place to be for a law firm; rental levels in the City have increased by 27% over the last five years, and our research shows that law firms in the capital will be hit by a 19% increase in business rates liability overnight [after] the revaluation on 1 April 2017."

Kennedys real estate partner Dennis Ko commented: "Business rates are a cost that have to be swallowed, but they may encourage firms to look at the space they have and think about cutting back in the areas that are expensive."

Even where firms are signing leasing deals, the amount of space they are taking is falling. Freshfields Bruckhaus Deringer signed a pre-let agreement for 255,000 sq ft at 100 Bishopsgate in February 2017, a significant reduction on the reported 370,000 sq ft the firm currently occupies in Fleet Street.

Freshfields is one of many firms to have moved staff to offices in cheaper locations outside of London in recent years. The magic circle firm is set to move up to 700 staff to its support centre in Manchester, which opened in 2015, and is also planning to open a second support centre in Toronto.

Increasing numbers of law firms are also adopting flexible and agile working policies to enable them to downsize expensive London premises. According to the report, 30% of the firms surveyed had an agile working policy, while 40% were looking at instituting one in the next 12 months.

Lawyers are the last bastion of the 'corner office as status symbol' culture, but that is starting to break down

Andrew Darwin, COO of DLA Piper's International LLP, said: "When CMS moved into their Cannon Street building they went completely open plan – you are seeing law firms evolving the way they occupy space in a way [that] most other sectors have been through before.

"Lawyers are the last bastion of the 'corner office as status symbol' culture, but that is starting to break down. In the future you will see more flexible use of space and offices with more open areas where people can collaborate more effectively."

One City partner commented: "Good quality City office buildings cost around £55 per sq ft – why would you pay that for your marketing and PR departments when they could be working on their laptops from a Costa?"

Another space-saving tactic increasingly pursued by law firms is moving to open-plan offices, with firms such as CMS, Bird & Bird and Ince & Co among those adopting open-plan configurations in recent years.

According to the CBRE research, in open-plan offices there is an average of one fee earner per 269 sq ft – 40% less than in more traditional layouts, where the average density is one fee earner per 439 sq ft. Firms with traditional office layouts pay an average of £21,247 in rent per fee earner – 35% more than the £13,642 per fee earner paid by law firms with open-plan offices.

"Open plan and agile working are the way forward," said Ko. "We are open plan and have been since we moved into our current HQ in 2008, and agile working is heavily promoted here."

The downsizing trend looks set to continue, as the impact of technology makes it easier for jobs to be handled from cheaper locations or carried out by fewer people.

Hogan Lovells global head of real estate Jackie Newstead said: "Businesses using less space is a trend we will continue to see, as we're just at the start of the artificial intelligence revolution. All businesses, whether lawyers or not, are looking at how much space they need per person."